As regulators circle Bitcoin, virtual money men ante up for the digital currency

Azar started talking about Bitcoin, the digital currency that has gained prominence this year for its wild price swings and for piquing the interest of regulators from New York to Germany. “He asked us if we’d given much thought to virtual currency, and, at the time, we really hadn’t,” says Cameron Winklevoss, who along with his brother in 2004 sued Facebook founder Mark Zuckerberg, saying he stole their idea for the social-networking site. “I got really fascinated by the implications for the financial world,” he says. Within weeks, the brothers — flush with cash from the $65 million they received after settling the Facebook case in 2008 — started buying Bitcoins. They weren’t the only ones. In the past six months, at least half a dozen venture capital firms that made fortunes from early contrarian bets on tech companies such as Twitter, Tumblr, Skype and Spotify have put ...